UNIT OWNER LEVIES
Each Unit owner must pay a share of Owners Corporation expenses (i.e. levies or owner contributions). Owners Corporations budget for expenses and then levy each owner in the Unit Plan for the money they need to meet those expenses.
How Levy Contributions are decided?
The annual levies that Unit owners must pay each year are decided at each annual general meeting. At that meeting the Owners Corporation must, by ordinary resolution:
agree on administrative and sinking fund budgets for the financial year
work out, based on the agreed budgets, the amount that each Unit must pay
decide the number of instalments the levies must be paid in
set the date when each instalment is due.
Sinking Fund Plan
It is mandatory that all Owners Corporations in the ACT have a sinking fund plan, which details the expected sinking fund expenditure for at least the 10-year period of the plan; and for each financial year of the plan. It should also include the total contributions required from members of the Owners Corporation necessary to meet the expected sinking fund expenditure for the financial year; and reserve an appropriate amount necessary to be accumulated to meet expected sinking fund expenditure over at least the remaining years of the plan.
The contributions levied on the owner of each Unit must be based on the contribution schedule Unit Entitlements, unless otherwise agreed by Unopposed Resolution.
The contribution schedule Unit Entitlements are listed on the Registered Units Plan.
Contribution or Levy Notice
The Owners Corporation must give each owner written notice of the contributions they owe.
The contribution notice must include:
the amount owing
the due date
any penalty if the payment is overdue
any previous payments that are overdue.
In the ACT, The Unit Titles (Management) Act 2011, stipulates that if a levy/contribution is unpaid after 28 days from the due date, simple interest accrues at a default rate of 10%. An Owners Corporation can increase this to a maximum of 20% by passing a Special Resolution.
If a payment is late, the Owners Corporation via the Executive Committee can decide not to charge the penalty, in full or in part, if there are special reasons.
If a contribution is not paid by the due date, the Owners Corporation can start debt recovery action to recover the amount. This is a decision that can be taken by the Executive Committee and is usually outsourced to a specialist debt collection agency.
If you would like any further information on Levies, please contact us.